Gold Prices Supported By Growing Calls For Fed Rate Cuts
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Yesterday’s close: Settled at 1327.9, up 16.8
Fundamentals: Gold ripped higher again yesterday with the trio of Dollar, stocks and Treasury yields all losing ground. The CME’s Fed Watch Tool is signaling a 96.7% probability the Fed cuts by 25 basis points this year with a 78.8% probability they cut by 50 bps. Furthermore, there is an 85.6% probability they cut 25 bp by September. Overall, this dovish rhetoric has been priced in and given Gold’s three-session run, it is due for a healthy breather. Keep a close eye on Fed Chair Powell who speaks at 8:45 am CT and Factory Orders at 9:00 am CT. But a healthy consolidation into jobs data Friday will be all we can ask for.
Technicals: Gold is bullish out above 1310.1-1313, however, look for a healthy consolidation as a buying opportunity. It is crucial for traders to capitalize on longs and be ready, willing and able to buy pullbacks to 1310-1313. Price action settled yesterday at our major three-star resistance level at 1327.7 and this is working to keep a lid on action today. Only a close back below 1300 will now signal a failure.
Resistance: 1327.7***, 1335.7**, 1349.8***, 1361.5***
Support: 1320.7**, 1310.1-1313***, 1300***, 1292-1295.1**, 1288.2***